Report from Davos: Why the 4th industrial revolution is headed our way

Against the backdrop of the Swiss Alps sparkling in the bright sun, I’ve been listening to some of the world’s most prominent business leaders discuss the next industrial revolution – and just what it will take to build a carbon-free economy.

The World Economic Forum held in Davos this week comes on the heels of the international climate meeting in Paris in December, and the energy and optimism from COP21 is also fueling Davos.

Over the past few days, much of the conversation here has focused on the role the private sector will play to innovate and develop the technologies needed to curb greenhouse gas emissions.

We’re looking at opportunity

Eric Xin Luo, chief executive officer of Shunfeng International Clean Energy, the Chinese solar energy group, described how one of their German subsidiaries has been using big data to help solar plants become more reliable.

Seizing the opportunity of the March 2015 solar eclipse, the company created models showing how solar panels can provide a consistent output in even with the sun turned off. This is not fantasy – it’s within our reach.

The sensor revolution is delivering for ParStream, too. A leading data platform company recently acquired by Cisco, ParStream is retrofitting wind turbines with sensors that can analyze terabytes of data in seconds.

It will help turbines become between 10 percent and 15 percent more efficient.

Emerging smart technologies can put us in the fast lane of implementing the Paris’ requirements, and also challenge us to think about how to accelerate development and prosperity for a larger share of the human population than ever before.

It is, as Paul Polman, the Unilever leader, described it, “the case for opportunity.”

A price on carbon will drive innovation

To drive what the World Economic Forum has dubbed the Fourth Industrial Revolution, business leaders are clear on one thing: We need a price on carbon.

A carbon price would provide investors with confidence to support corporate advancements in carbon reductions, noted Doug McMillon, Walmart’s chief executive. He has some good insight as Walmart just announced that it not only met, but exceeded, the retailer’s 20 million metric tons goal for carbon reduction at 28 tons.

The timing couldn’t be better, added Feike Sijbesma, head of Royal DSM.

“Oil prices are relatively low,” he told us, “and it is easier at a relatively low oil price to add that carbon pricing than when oil prices would already be very high.”

It’s clear from listening to the many leaders at Davos that the world has not only recognized that climate change is real, but that it’s also inspired by real solutions that can curb its catastrophic effects.

Said Stuart Gulliver, head of banking giant HSBC Holdings, “You must be really blind if you don’t see the tipping point is here in clean energy.”

This optimism gives us a real shot at progress on climate and a more equitable, shared prosperity for Earth’s nearly 7.4 billion inhabitants. It’s what The Fourth Industrial Revolution is all about.